University of Cincinnati University of Cincinnati College of Law Scholarship and Publications Faculty Articles and Other Publications College of Law Faculty Scholarship 1986 Law and Policy in the Activist State: Rethinking Nuclear Regulation Joseph P. Tomain University of Cincinnati College of Law, [email protected] Follow this and additional works at: http://scholarship.law.uc.edu/fac_pubs Part of the Energy Law Commons Recommended Citation Tomain, Joseph P., "Law and Policy in the Activist State: Rethinking Nuclear Regulation" (1986). Faculty Articles and Other Publications. Paper 247. http://scholarship.law.uc.edu/fac_pubs/247 This Article is brought to you for free and open access by the College of Law Faculty Scholarship at University of Cincinnati College of Law Scholarship and Publications. It has been accepted for inclusion in Faculty Articles and Other Publications by an authorized administrator of University of Cincinnati College of Law Scholarship and Publications. For more information, please contact [email protected]. RUTGERS LAW REVIEW VOLUME 38 Winter 1986 NUMBER 2 LAW AND POLICY IN THE ACTIVIST STATE: RETHINKING NUCLEAR REGULATION Joseph P. Tomain* I. INTRODUCTION This Article concerns the interaction of law and policy and its impact on the formation of rules of law and their implementation. In a modern bureaucratic polity, law and policy interact according to a set formula: law follows policy in the activist state. This Article will analyze the law- follows-policy formula in the context of nuclear power regulation. Nuclear policy has not kept up with the political or economic climates which have grown skeptical of nuclear power. This failure or inability of the nuclear power bureaucracy to respond effectively to political and economic changes is the essential weakness in the law-follows-policy formula. When dramatic changes in politics or markets occur, policy that has been institutionalized by law becomes fragmented, and unfairness, inefficiency, and regulatory failure result. Specifically, in the regulation of nuclear power, consumers, investors, and taxpayers have had to bear the costs of industrial abandonment of nuclear projects. This result is both unfair and inefficient because these groups enjoy little participation in nuclear regulation policymaking. Thus, a cost-allocation theory maxi- mizing efficiency and fairness must align more closely financial liability with policymaking responsibility. A pristine legal culture where law is autonomous and legal rules are completely or nearly devoid of policy can be conceived' but such a 0 Copyright reserved 1986 by Joseph P. Tomain * Joseph P. Tomain, Professor of Law, University of Cincinnati College of Law; A.B., University of Notre Dame; J.D., George Washington University. This Article represents a modified version of chapters one and three of a book titled Nuclear Power Transformation to be published by Indiana University Press in 1987. Both the book and the Article have benefited from the research assistance of Rebekah Bell, Thomas L. Gabelman, James M. Jorling, Michael Norse, and Lynn Schumacher. The author owes special thanks to Connie Burton for her dedicated and diligent research assistance, and to the University of Cincinnati College of Law for helping fund this project. 1. Compare H.L.A. HART, THE CONCEPT OF LAW 18-25 (1961) (the strongest modern statement 188 RUTGERS LAW REVIEW [Vol. 38:187 positivist state is not ours. Law reflects the economic, political, and moral values which are the shaping forces of policy. Indeed, law and policy interact in several configurations.2 Legal cultures and subsystems within a single culture differ primarily in the degree that public policy influences law.s Modern government, with its emphasis on economic planning and of legal positivism as a neutral rules system) with R. DWORKIN, TAKING RIGHTS SERIOUSLY 14-80 (1977) (asserting that law is more than a system of rules; it also consists of policies, principles, and standards informed by politics). 2. At least four models describe the interaction of law and policy. The author has consciously -chosen the simplest of the four; the law-follows-policy formula is the dominant mode of interaction. The focus is on the legislation Congress enacts, the regulations agencies promulgate, or on what a reviewing court decides. Model I, in which law follows policy, is based on two legal realist premises. The first isthat law is not value neutral. The second is that the legal system assists government in the implementation of its policies. See, e.g., B. ACKERMAN, RECONSTRUCTING AMERICAN LAW 6-22 (1984); G. WHITE, PATTERNS OF AMERICAN LEGAL THOUGHT 99-135 (1978). In increasing order of complexity, Model II posits that policy follows law. This positivist model is more complex because it requires a settled definition of law and a partial suspension of belief. Model 11requires a conception of law as an objective and neutral manifestation of a just order that exists as given and is then applied to a determinate policy dispute or problem. Thus, policy is formulated to fit the given law. Model 11functions at an operational level. For example, a Nuclear Regulatory Commission staffer may accept the agency's promotional nuclear policy and wish to limit consumer intervention in a licensing hearing. The staffer, however, is constrained by the law of due process and must allow meaningful participation. Therefore, policy must follow law. Note that a study of the law's impact on an agency, from an organizational perspective, is distinct from the more systematic examination of the interaction of law and policy which is the subject of this Article. See J.M. Montgomery, Law as an Organizational Variable: An Examination of the Impact of Law on the Performance of the U.S. Nuclear Regulatory Commission (April 23, 1984) (unpublished doctoral dissertation, School of Government and Business Administration, George Washington University). The third configuration combines the first two models. In Model III law and policy interact in different sequences at different times. Sometimes law affects policy; sometimes policy shapes law. This model adds more detail and raises new questions: Are there identifiable sets of circumstances or categories in which one formula governs the other? Is there an arrangement or relationship between categories? Model Ill better describes the operational interaction of "law" and "policy" as general topics. Further, in this model, the interaction of law and policy is the sum of the manifestations of law and of policy. The word "manifestation" should be explained. Law and policy are not concrete. Rather, they are artificial devices that are used to understand and make sense of the complexities of everyday objective and subjective, individual and collective, life. Thus, the "interaction of law and policy" is a manifestation of the operations of the modern regulatory state. Model IV can be called the Cybernetic Model. In this model, law and policy inform, influence, and illuminate each other as information continuously flows through two interconnected systems. The systems are neither discrete nor ordered as suggested in Model IIl. In the Cybernetic Model, the interaction of law and policy describes an entirely different manifestation than does Model III: it is something other than the sum of the manifestations of law and policy. See, e.g., J. STEINBRUNER, THE CYBERNETIC THEORY OF DECISIONS (1974). Model IV is the most attractive but is also the most problematical. The model is attractive because it does not order the relationship between law and policy and thus, is less deterministic than the others. It is also less reductionist because it does not demand firm definitions of either law or policy. Thus, the interactions of law and policy in Model IV are more flexible, fluid, and open to possibilities. This last characteristic is the undoing of the model. The possibilities are endless: Law and policy may be arranged hierarchically, cyclically, circularly, statically, dynamically, continu- ously, or discontinuously, or some combination thereof. This wide range of possibilities presents the most pressing problem of Model IV: no adequate vocabulary exists to describe the phenomena that occur within the model. 3. See C. LINDBLOM, POLITICS AND MARKETS (1977) (a thorough analysis of various social configurations which differ to the extent governments replace markets). 19861 NUCLEAR LAW AND POLICY social steering, depends on law to implement policy. 4 Such dependency, however, is problematic when the policy choice turns out to be mistaken or carries with it unforeseen consequences. One example of mistaken policy is the promotion of private commercialization of nuclear power by a joint government-industry enterprise. The story that unfolds demonstrates that when there is a drastic change in external politics and markets, policy is splintered and unfairness and inefficiency result5 because the now- mistaken policy has become embedded or institutionalized in society by law. This Article contains certain narrowing assumptions. First, because defining "law" is the consuming task of jurisprudence,6 and defining "policy" is that of political science,7 working definitions of both are used. Second, the discussion of the interaction of law and policy concentrates on nuclear power and its regulation. Thus, the analysis is contextually-based and therefore bounded. Finally, the discussion of nuclear regulation also takes place within a distinct legal culture referred to as the activist state, described